types of retirement funds

Types of Retirement Funds in the Philippines

types of retirement funds
  1. Pension Plans

A pension plan is a type of retirement plan in which the employer contributes to a fund that is set aside for the employee’s future benefit. Typically, the employee’s money is invested in the pool. After that, you’ll receive your earnings in the form of a monthly payment or a lump sum, equal to the total of your contributions, when you retire.


  1. PERA Investment

The Personal Equity and Retirement Account (PERA) investment, which was launched by the Bangko Sentral ng Pilipinas (BSP), aims to assist Filipinos aged 18 and up in saving money for retirement. If you are an OFW, you can contribute up to PHP 200,000 each year.

PERA is a voluntary retirement account in the Philippines that allows you to invest in PERA goods. This sort of retirement investment qualifies for a 5% tax credit. Additionally, investment earnings are tax-free.


  1. Insurance Plans

Insurance policies can safeguard you and your possessions from financial losses while also serving as a retirement fund. There are numerous insurance packages available to meet your needs. You also have the option of choosing between life and non-life insurance.

Life insurance policies pay out a predetermined amount in the event of the insured’s death. Non-life insurance products, on the other hand, are policies that protect persons, properties, and other obligations.


  1. Investment Funds

An investment fund is a collection of funds from numerous investors pooled together to acquire stocks. The ownership of each investor’s stake is retained and controlled by them. Investment funds normally have a higher investment amount than mutual funds, and their return potential is also higher.


  1. Real Estate

Real estate investing is a great method to supplement your retirement income. However, depending on the property, you may need to invest hundreds of thousands or even millions of dollars. Before beginning to construct your real estate portfolio, you may need to research the local property market.


  1. Mutual Funds

Mutual funds are professionally managed investment products (bonds, equities, and money markets) that pool money from a variety of investors. The funds are spread over a variety of assets. You will receive equal shares of the investment’s profits and losses with this form of retirement fund. For investors, a fund manager is in charge. Mutual funds are frequently offered by insurance firms in the Philippines.


  1. Unit Investment Trust Fund (UITF)

UITF is a pool of investments using assets from several investors. Your investments will also be managed by a professional fund manager. Money market funds, equities funds, and balanced funds are commonly held by UITFs. Banks and the BSP regulate this form of retirement fund.


  1. Exchange-Traded Funds (ETF)

ETFs are a type of investment that may be bought and traded in a matter of seconds. In the same way as mutual funds and UITFs are pools of assets funded by diverse participants, ETFs are. ETFs, on the other hand, can be traded like normal stocks throughout the day.

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